A Small Business Owner’s Case for Raising the Minimum Wage

It will level the playing field for big corporations vs. the little guy.

Activists chant for higher wages outside a McDonald's restaurant on April 8, 2014, in Stamford, Conn.

Photo by John Moore/Getty Images

Nine or ten dollars an hour? Twelve? Or all the way to $15?

For much of the country, significant minimum wage hikes are coming—at least in the areas where they haven’t happened already. Public debate on the issue in many states and cities has been reduced to a disagreement between the forces that want to keep increases to a small amount per hour and folks like Chicago’s “Fight for 15” group and new Seattle Mayor Ed Murray who propose a $15 per hour target.

We can talk macroeconomics all we want, but I believe most of us are going to give or withhold our support for raising the minimum wage based largely on our perceived self-interest. So with that in mind, here’s my self-interest: As a small business owner in the restaurant industry, I think a higher minimum wage is great for my business and me. Make the wage $15 an hour. Make it $20. Make it high enough that dishwashers get paid like office workers.

A nonlivable minimum wage amounts to a passing off of costs by the big guys.

Here’s why. A higher minimum wage helps reduce the structural advantages large corporations have over small businesses, and that in turn helps create a context where high-quality independent businesses can thrive by overdelivering compared to our better-capitalized, but mediocre, big competitors.

When individuals like me start businesses in our communities with the intent of selling quality goods and services, we quickly find that our biggest obstacle is the low prices offered by large corporations. The issue isn’t that those companies are selling the same things we are for less. The issue is that the low-priced commodities sold by superstores, warehouse clubs, and restaurant chains influence our customers’ understanding of what everything costs.

For example, the reason it’s hard to sell a really good, locally produced burger in many markets isn’t because the product isn’t worth it; even $10 or $12 for a handcrafted product that includes 6 ounces of grass-fed beef is a steal compared with what you can buy at Applebee’s or Olive Garden for that price. The reason it’s hard to market a high-quality burger is that so many companies sell burgers so cheaply—regardless of how bad they are—that we think a burger “should” cost only $5 or $6.

Now, if the minimum wage were raised high enough, the cost of human resources would have to be borne in full by their employers, large and small. In turn, everyone will have to raise prices—and the prices the big guys charge for their products will be closer to their true costs.

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For example, the reason it’s hard to sell a really good, locally produced burger in many markets isn’t because the product isn’t worth it; even $10 or $12 for a handcrafted product that includes 6 ounces of grass-fed beef is... More...

A world where items are priced near their true costs is a world that we small businesses already live in. We can’t easily pass many of our expenses onto the taxpayers. We typically lack the resources and scale to make it feasible to move our production far away to cheaper jurisdictions and invest in our own subsidized transportation networks. But if labor becomes a bigger cost for large and small companies alike, the subsidies that benefit large businesses will be less relevant, and us little guys will be competing on a less slanted—though still not level—playing field.

A semilevel playing field is good enough for me. Like many small business owners, I know that if the big guys have only some advantages over my team, we can make up the difference in quality, service, and heart.

Jay Porter operated San Diego’s farm-to-table restaurant The Linkery for about a decade; his new restaurant, Salsipuedes, will open in North Oakland later this year.